Debt Deal Could Spare Middle and Upper Class Seniors, But Slam The Poor

That means Medicare benefits are off-limits, a message that Democrats plan to reinforce at every opportunity through November 2012. With Republicans demanding trillions in cuts to raise the debt limit, however, savings are going to have to come from somewhere. The most logical option left is Medicaid, a favorite conservative target whose low-income recipients carry little clout in Washington compared to Medicare's elderly and middle-class base.

But there is one politically tricky obstacle to cutting Medicaid: Millions of seniors -- including those who consider themselves middle class -- rely on Medicaid cover their nursing home care, meaning any raid on its funding could complicate Democrats' image a the tireless champion of retirees across the land.

Mindful of the problem, aides and lawmakers are floating a way forward: shielding the elderly from Medicaid cuts while slashing aid to poor and uninsured Americans.

"A lot of us are concerned that Medicaid as it effects nursing home patients and people with a disability is irreplaceable," Rep. Rob Andrews (D-NJ) told reporters on Thursday when asked about potential cuts. "For low-income people who are otherwise healthy there may be creative ways to help fulfill our obligations for health care."

On the Senate side, a Democratic leadership aide told TPM that the caucus was prepared to dig in and hold the line on cuts to benefits seniors receive from Medicaid as well.

"Democrats are not going to let Republicans force seniors out of nursing homes, period," the aide said. "We should be cutting taxpayer giveaways to oil companies, not making seniors bear the burden of Republicans' fiscal irresponsibility."

President Obama proposed finding hundreds of billions of dollars in savings to Medicaid and Medicare by improving efficiency and reducing waste in his April speech on the deficit. He notably singled out two groups as his primary source of concern in any deal: seniors in nursing homes and poor and disabled children.

For the GOP, cuts to Medicaid are a top issue this year. House Republicans included a major overhaul to Medicaid in their budget and want to give governors more flexibility to shut out residents from coverage. On the state level, New Jersey Gov. Chris Christie (R) recently proposed a major overhaul of eligibility levels that would require a family of three to make under $5,317 a year to qualify for Medicaid, down from $24,645 currently. In Texas, Gov. Rick Perry (R) has threatened that his state might leave the program entirely.

"I don't think the majority of Democrats will accept huge cuts in Medicaid: we're already fighting many of our states on the subject," Pascrell said.

Recent newspaper reports that Medicaid is on the chopping block in deficit talks are raising red flags within the party. "There has been an unsettling silence around Medicaid -- even from members of my own party," Sen. Jay Rockefeller (D-WV), told the Wall Street Journal. "Medicaid suddenly looks like the sacrificial lamb."

TPM asked Rep. Henry Waxman (D-CA), a leading advocate of expanding coverage, if he expected Democrats to include substantial Medicaid cuts to end up in a final deal.